Ofcom have ordered BT to separate from its Openreach network, as the company has failed to voluntarily address what Ofcom labelled “competition concerns”. The monopoly that BT holds over the UK’s broadband infrastructure will undergo a gradual break-up, but it is still seen as a victory for rivals to the telecoms giant.
The Telecoms regulator said formal notification has been given to BT, requiring the “legal separation” of Openreach “after BT failed to offer voluntary proposals that address our competition concerns”.
Ofcom said creating a more independent Openreach, which works “in the interest of all providers, not just BT” was vital for improving broadband and telephone services across Britain.
In a statement, it said: “We are disappointed that BT has not yet come forward with proposals that meet our competition concerns.
“Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users,” it said.
The plan is for Openreach to become a “distinct company” within BT, with more control over its own finances and an independent board.
It comes after BT appointed a former Ofcom director as the first chairman of its Openreach business in a bid to make the network division more independent.
Mike McTighe, who spent eight years on the board of the communications industry regulator before stepping down last year, will join Openreach in January, BT announced last night.
Responding to Ofcom’s announcement this morning, BT said: “We put forward proposals in July that we believe are fair and sustainable, and that meet Ofcom’s objectives without disproportionate costs.
“We are implementing these proposals, and have just appointed Mike McTighe to be the first chairman of Openreach. We are in discussions with Ofcom on two outstanding issues, the reporting line of the Openreach CEO and the form of legal incorporation.”
“We will continue to work with Ofcom to reach a voluntary settlement that is good for customers, shareholders, employees, pensioners and investment in the UK’s digital future.”